INTRODUCTION

1. INTRODUCTION

2. Classifying Countries • By per capita GNI (Gross National Income) • World Development Report by World Bank (http://www.worldbank.org/) • By economic freedom • Economic Freedom Survey by Heritage Foundation (www.heritage.org) • By political freedom • Freedom in the World by Freedom house (http://www.freedomhouse.org/)

3. Per Capita GNI • Economies are divided according to 2000 GNI per capita, calculated using the World Bank Atlas method. • low income, $755 or less • lower middle income, $756- $2,995 • upper middle income, $2,996- $9,265 • high income, $9,266 or more

4. Political Freedom • Countries are classified into free, partly free, and not free. (www.freedomhouse.org) • Two factors in evaluating political freedom: • Political rights • civil liberties • Indicators for political rights • Fair and competitive elections • Power for elected representatives • Ability to organize political parties • Safeguards on rights of minorities

5. Political FreedomContinued • Indicators for civil liberties • Freedom of the press • Equal right under the law • Personal social freedom • Government corruption and indifference • 192 countries are rated according to political rights and civil liberties. • The U.S. and many European countries are classified as “free” • The worst rated countries include Cuba, Iraq, Libya, and North Korea.

6. Economic Freedom • Two factors in evaluating economic freedom • Freedom from government restraints on economic activities • Legal and institutional frameworks to safeguard economic freedom • 155 countries are ranked according to economic freedom in 10 categories. (www.heritage.org) • Categories: • banking, capital flows, monetary policy, taxation, trade policy, wages and prices, government intervention, property rights, regulation,and black market activities

7. Economic FreedomContinued • Economic freedom and economic well-being (measured by per capita GDP) are highly correlated. • Hong Kong and Singapore rank first and second respectively. • The worst ranked countries are Iraq, Libya, and North Korea (#155).

8. Competitiveness • Competitiveness of a country is evaluated according to its economic performance, government efficiency, business efficiency and infrastructure. (www.imd.ch) • 49 countries are rated and ranked. • The U.S. ranks first and Singapore ranks second.